Reserves For All? Central Bank Digital Currency, Deposits, and their (Non)-Equivalence

Niepelt, Dirk (July 2018). Reserves For All? Central Bank Digital Currency, Deposits, and their (Non)-Equivalence (Unpublished) (Discussion Paper Series DP13065). London: Centre for Economic Policy Research (CEPR)

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I offer a macroeconomic perspective on the "Reserves for All" (RFA) proposal to let the general public use electronic central bank money. After distinguishing RFA from cryptocurrencies and relating the proposal to discussions about narrow banking and the abolition of cash I propose an equivalence result according to which a marginal substitution of outside for inside money does not affect macroeconomic outcomes. I identify key conditions on bank and government (central bank) incentives for equivalence and argue that these conditions likely are violated, implying that RFA would change macroeconomic outcomes. I also relate my analysis to common arguments in the discussion about RFA and point to inconsistencies and open questions.

Item Type:

Working Paper

Division/Institute:

03 Faculty of Business, Economics and Social Sciences > Department of Economics

UniBE Contributor:

Niepelt, Dirk

Subjects:

300 Social sciences, sociology & anthropology > 330 Economics

ISSN:

0265-8003

Series:

Discussion Paper Series

Publisher:

Centre for Economic Policy Research (CEPR)

Language:

English

Submitter:

Dino Collalti

Date Deposited:

07 Oct 2019 11:39

Last Modified:

12 Nov 2019 15:48

BORIS DOI:

10.7892/boris.129924

URI:

https://boris.unibe.ch/id/eprint/129924

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